Doing business in the Aloha State? Expand your available offerings to work with a sometimes underserved portion of the market with the FHA Hawaiian Homelands program. Designed to help native Hawaiians purchase or refinance homes that are under homestead lease (are on native lands), these mortgages offer low down payment requirements and flexible underwriting standards.
A one-time up-front mortgage insurance premium is required, but there are no further annual or periodic mortgage insurance premiums charged.
The Hawaiian Homes Commission Act
As early as the 1800s, foreigners arrived in the Hawaiian Islands and began to claim and farm land for themselves. In response to many native Hawaiians having been forced off their ancestral lands, the Hawaiian Homes Commission Act was put into law in 1921, setting aside approximately 200,000 acres as a land trust for Native Hawaiians.
Low down payment, low interest rate loans are available to the lessees of residential parcels on this land to facilitate the purchase and refinancing of their homes.
Hawaiian Homelands Basics
- 600 Minimum qualifying credit score (580 for Correspondent Delegated).
- Available in 15 and 30 year fixed terms.
- Eligible properties include 1 – 2 unit primary residences, Manufactured Housing, FHA Approved Condominiums, Townhouses, and PUDs.
- The mortgaged property must be located within the Hawaiian Home Lands covered under a homestead lease issued under Section 207(a) of Hawaiian Homes Commission Act, 1920.
- This program is limited to owner occupants who are at least 18 years of age and certified as eligible to hold a Hawaiian Home Lands Lease, or possesses a lease of Hawaiian Home Lands issued under Section 207(a) of the Hawaiian Home Commission Act, 1920, that has been certified by the Department of Hawaiian Home Lands as being a valid current lease and not in default.
- Purchase and Refinance options available.
Homestead Leases
Hawaiian homelands are areas that are held in trust by the state of Hawaii for Native Hawaiians. Pieces of land in these areas are not bought and sold in quite the same way as properties in most of the United States, but are instead leased. They can be used for residential, agricultural, or pastoral purposes, in terms of up to 199 years.
Additional benefits include
- Yearly lease rental of $1.00.
- Seven year exemption from property tax.
- Exempt from tax on land.
- Lease can be passed to heirs.
Photography by [Christian Weber] © 123RF.com
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Tags: FHA, hawaiian homelands
